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ISDA Warns UMR May Limit Effective Hedging

ISDA Warns UMR May Limit Effective Hedging

Posted on Tue, Mar 12, 2019 @ 7:22

By James Thursfield
March 12, 2019, Global Investor Group

Small buy-side firms may be incentivized to reduce their derivatives exposure to stay outside of the phase-five threshold for uncleared margin rules, according to the International Swaps and Derivatives Association (ISDA).

On March 11, the head of trade body ISDA explained that the burden that firms would face as they calculate the amount of non-cleared derivatives on their books in order to gauge whether they are required to post initial margin could incentivize them to reduce their derivatives exposures.